Finance Minister Nirmala Sitharaman on Tuesday said that capital expenditure has not been lowered. Also, actual release under Scheme for Special Assistance to States for Capital Investment (SASCI) in FY25 is now close to budget estimate of ₹1.5 lakh crore and higher than revised estimates of ₹1.25 lakh crore.
“There has been no cut in the capex of the Central government,” she said while responding to former Finance Minister P Chidambaram’s criticism. Earlier in the day, he said in a social media post: “It is simple arithmetic that the government has cut ₹92,682 crore and ₹90,887 crore, respectively, under the two heads. I asked the reasons for the cut. The Hon’ble FM denied there was any cut! I am speechless.”
Sitharaman said the former Finance Minister’s assertions of a cut in capital expenditure was “misleading” and based on “flawed comparisons”. Budget Estimates (BE) are prepared before the financial year begins and naturally evolve into Revised Estimates (RE) based on expenditure trends, implementation capacity, and emerging priorities. “This is standard practice in public finance,” she said.
In FY24-25, capital expenditure was influenced by several factors: the Model Code of Conduct during general elections, extreme weather events, and lower-than-expected spending by States and certain central agencies. Additionally, many States failed to submit utilisation certificates, making further fund releases imprudent. “The revisions were not due to fiscal constraints,” she said.
According to the Finance Minister, a year-on-year comparison shows that the capex numbers have risen from BE (23-24) at ₹10.01 lakh crore to BE(24-25) at ₹11.11 lakh crore, showing an increase of 11.11 per cent. The BE (25-26) for capex stands at ₹11.21 lakh crore, higher than BE 24-25. Similarly, the RE (23-24) was estimated at ₹9.50 lakh crore and the RE (24-25) is estimated at ₹10.18 lakh crore, indicating an increase of 7.3 per cent.
Since 2021, outlays for capex by the central government have increased exponentially and it rose from ₹4.12 crore in FY21 to ₹11.2 lakh crore in FY26. Further, spending on SASCI of FY25 was ₹1.50 lakh crore which was revised to ₹1.25 lakh crore as on February 1, 2025. “I have mentioned in the House that the actual releases for SASCI (as of March 26) in FY25 is ₹1,46,362 crore. This is an increase over RE 24-25, what is there to be ‘speechless’?” she asked.
She said that former Finance Minister’s selective arithmetic and flawed comparisons between BE and RE of the same year may serve political rhetoric but do little for informed public discourse. “The Government’s fiscal prudence stands firm, reflective of ground realities and transparent fiscal management, something perhaps unfamiliar to Shri @PChidambaram_IN ’s from his days in office,” she said.